SALES AND DISTRIBUTION

FUNCTION

Presented by-

Swati Singh (165)

Garima Sanger (133)

Karan S Bora (137)

Mohd. Sadiq Khan (205)

Mohd. Saad Rashid (143)

Vikas Yadav (170)

FMCG Industry in India

• At present, the fourth largest sector with a total market size in excess of $13 billion as of 2012.

• Expected to grow to a $33 billion industry by 2015 and to a whooping $ 100 billion by the year 2025.

• Highly fragmented FMCG market and a considerable part of the it comprises of unorganized players selling unbranded and unpackaged products.

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HINDUSTAN UNILEVER

• India’s largest consumer goods company based in Mumbai, Maharashtra.

• Owned by British- Dutch company Unilever, controls 52% majority stake in HUL.

• Headquartered in Mumbai, India.

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I.T.C. Limited

• Incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited

• Changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974.

• Headquartered in Kolkata, West Bengal, India.• Employs over 29,000 people; more than 60

locations across India. • Listed on Forbes 2000.

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OVERVIEW OF THE COMPANIES

HUL ITC

Product lines Soaps, shampoos, detergents, beverages, packaged foods, personal care, cosmetics.

Cigarettes, foods, apparel, personal care, stationary, safety matches and agarbattis.

Market share 36.4% 30.3%

Growth rate Net profit grew at the rate of 17% .

Net profit grew at the rate of 25%.

Profit 2011- 2012- 2599.23 crores 2011- 2012- 1,333 crores

Turnover 2011- 2012- 21,735.6 crores 2011- 2012- 4,071.32 crores

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SALES ORGANIZATION STRUCTUREI.T.C. LIMITED HINDUSTAN UNILEVER

Redistribution stockist

Territory sales incharge

Sales officer

Area sales Manager

Regional sales manager

Regional Manager

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RESPONSIBILITIES OF A SALESPERSON

I.T.C. LIMITED

• Merchandising.

• Checking stocks.

• Getting distributor’s feedback.

• Maintaining good PR with the distributors

HINDUSTAN UNILEVER

• Selling and marketing of products.

• Booking orders.

• Reporting on a daily basis.

• Getting feedback from the distributors.

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SALES FORCE AUTOMATION

I.T.C. LIMITED

• SAP is used for improving transparency in billing and order placing.

• Sify online’s distribution management.

• VAJRA machine for booking orders.

HINDUSTAN UNILEVER

• HHT machines are provided for taking the orders and billing purpose.

• UNIFY software is used.

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SETTING UP OF SALES TARGETI.T.C. LIMITED HINDUSTAN UNILEVER

• Minimum billings per month.

• Sales volume

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• Non- tobacco division: stock availability in every outlet.

• Tobacco division- 1. Stock availability in

every outlet.2. Sales volume-

(+20%) of the last month sales.

CRITERIA OF TERRITORY ALLOCATION

I.T.C. LIMITED

• Past records

• On rotational basis.

HINDUSTAN UNILEVER

• On the basis of area size:– Less experienced in

retail outlets & kirana stores.

– More experienced in high frequency stores.

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PERFORMANCE APPRAISAL SYSTEM

I.T.C. LIMITED

• Monthly basis• Amount of sale of

different products.• Achievement of sales

targets• Feedback form.

HINDUSTAN UNILEVER

• Performance evaluation is done using QOC model.

• Quantitative- 80% Qualitative- 20%

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TRAINING

I.T.C. LIMITED

• Initial training- 20 days; senior salesperson accompanies the salesperson.

• Skill training- – WEP; every 6 months– Training and

development

HINDUSTAN UNILEVER

• Initial training on product knowledge.

• Fortnight training on field job.

1204/10/2023

MOTIVATION & COMPENSATION

I.T.C. LIMITED

• Best salesman competitions are held.

• Awards and trophies are provided to the winners.

HINDUSTAN UNILEVER

• MOC awards given on the basis of QOC score.– QOC score > 4.5: 7-star

award– QOC score > 4: 5-star

award– QOC score > 3.5: 3-star

award

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DISTRIBUTORS

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HINDUSTAN UNILEVER

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Hindustan Unilever ltd.

Carrying and Forwarding Agents

Redistribution Stockist

Wholesalers

Urban retailers

Consumers

Rural retailers

Sales and Distribution Management

I.T.C. LIMITED

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Company Hub Factory

Carrying and Forwarding Agent

Distributors

Retailers

Consumers

Small Wholesalers

FUNCTIONS OF THE CHANNEL MEMBERS

I.T.C. LIMITED

• Distribution & promotion of goods.

• Gather information regarding the demand and competition.

• Inventory management.

HINDUSTAN LEVER

• Provide logistics support.

• Financing.• Make the brand

available in rural areas.

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CHANNEL SELECTION CRITERIA

I.T.C. LIMITED

• Financial reputation.• Infrastructure• Delivery vans• Degree of

computerization.• Past performance.• To deal in cigarettes, it

is must to deal in other goods.

HINDUSTAN UNILEVER

• Goodwill.• Market reach• Past reputation.• Availability of sales

force.• Warehouse &

infrastructure.• Investment capacity

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FINANCIAL TERMSITC HUL

Mode of payment Cheque. RTGS

Initial deposit No initial deposit NIL

Margin 3 % 5.5%

Credit limit No credit; only cash No credit to distributor

Order placed Online software- sify online Online software- Unify

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ITC HUL

Order cycle time 7 day pipeline reserve alongwith the replacement of order sold in a day.

In 2-3 days.

Time period for late payment

0 days. 4-6 days.

Interest on late payment

Yes; 8-10% Not mentioned; demand draft is taken.

Cash/ trade discount

NIL NIL

Mode of transport of goods

3- wheelers, pick- up vans. Delivery vans, mini- trucks.

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SATISFACTION INDEXParameters Weightage Rating Satisfaction

IndexProduct quality 25 5 125

Service quality 20 3 60

Promotional activities

20 3 60

Field work 15 4 60

Trade promotion 20 3 60

Total 100 18 365

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5 Very good

4 Good

3 Average

2 Below average

1 Dissatisfied

SATISFACTION INDEX

Parameters Weightage Rating Satisfaction Index

Product quality 25 2 50

Service quality 20 3 60

Promotional activities

25 5 175

Field work 15 4 60

Trade promotion 15 5 75

Total 100 19 420

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RETAILERS

RETAILERSITC HUL

Role Sales to the customer, determining trends in the market

Sales to the customer, trends determination in the market

Payment Cash Cash

Margins on different products

Upto 10% 2-10%

Average sales per month

1) Rs. 20-25 thousand per month2) Rs. 10000 per month

1) Rs. 70-80 thousand per month2) Rs. 48000 per month

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ITC HUL

Promotional activities Bingo display stands are provided to the retailers, dummy packs.

Display packs, gifts to retailers.

Transport service Delivery vans, 3- wheeler autos.

Delivery vans, autos.

Average order cycle time

Next day 2-3 days

Credit period from distributor

Credit period of 1 week from distributor

Credit period of 1 week from distributor

Service of sales person

Pay frequent visit to them Come once or twice in 4-6 months

Acquisition of products from

Distributor (Govindpuri) Wholesaler (Kalkaji)

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SATISFACTION INDEXParameters Weightage Rating Satisfaction

IndexDelivery time 15 4 60

Quality of product

20 5 100

Incentives 10 3 30

Promotional activities

15 3 45

Transport service

15 5 75

Commercial terms

10 2 20

Service of salesperson

15 2 30

Total 100 24 360

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5 Very good 4 Good

3 Average 2 Below average

1 Dissatisfied

SATISFACTION INDEXParameters Weightage Rating Satisfaction Index

Delivery time 15 5 75

Quality of product

15 4 60

Incentives 15 4 60

Promotional activities

20 5 100

Transport service

10 4 40

Commercial terms

10 3 30

Service of salesperson

15 4 60

Total 100 29 425 27

RECOMMENDATIONS

I.T.C. LIMITED• Provide credit period facility to distributors.• Provide greater margin.

HINDUSTAN UNILEVER• Provide credit period facility to distributors.• Salespersons should pay frequent visits to

the distributors and retailers.• More prompt in order delivery.

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